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Lackawanna County pocketed $2.4 million less than the $13.4 million sale price for its former nursing home after subtracting closing costs, including a $900,000 charge added late and not previously disclosed.

With all closing costs deducted, county proceeds from the sale of the Lackawanna County Health Care Center to Millennium Management LLC amounted to $11,075,253, about 18 percent less than the sale price, according a settlement statement from the March 2 sale.

The closing costs included a credit to Millennium of $900,000 the county agreed to just two weeks before the closing. The credit was given to ensure, among other things, that Millennium could afford what it said was the unanticipated cost of maintaining benefits comparable to the county health insurance plan, county officials said.

But union officials representing workers at the nursing home allege the new owner is offering a health insurance plan that drastically reduces benefits. Millennium Management said the union was wrong, and that it would offer a comparable plan.

Minority county Commissioner A.J. Munchak called Monday for the county to use the last-minute negotiation and $900,000 credit as leverage to ensure Millennium lives up to the union contract.

"If they don't offer comparable health care, I want the $900,000 back for the taxpayers, per the sales agreement," said Mr. Munchak, who remains a commissioner despite facing a 40-count indictment on federal racketeering and related charges along with former Commissioner Robert C. Cordaro.

Millennium Management came to the county on Feb. 18 with a list of problems and seeking a $1.4 million credit on the sale, according to county Chief Financial Officer Tom Durkin. The list included, in part:

- Issues with the facility in Blakely, including exposed pipes and holes in fire walls that had not been properly patched.

- Key positions that were vacated, including a human resources employee who would have been crucial to converting to the company payroll system.

- A substantial and unanticipated cost for health care benefits for the company.

"They didn't realize going into this whole deal how comprehensive the county (health care benefits) were," Mr. Durkin said. "And they found out it was going to cost them a considerable amount of money to provide."

Commissioner Corey O'Brien said the county had not yet determined whether comparable health care is being offered by Millennium. He wouldn't comment on Mr. Munchak's call that commissioners seek a return of the $900,000 credit, should Millennium Management not offer a comparable plan.

"We expect (Millennium) to live up to their end of the bargain, but I'm not going to deal with hypotheticals," Mr. O'Brien said. "We have to get a grip on the plan offered the employees there and whether we believe it is equivalent."

Within a week of the Feb. 18 letter, Mr. Durkin said the county and Millennium agreed to a closing credit of $900,000. For stories that appeared in The Times-Tribune over the next month, no county officials made mention of the credit. Mr. Durkin and others simply said that the sale price was $13.4 million.

Among other closing costs the county had anticipated was a $1 million charge for paying Millennium Management to not discard vacation time, personal days and sick time that nursing home workers had accumulated. Mr. Durkin said it was his understanding that it was common practice for the seller to pay for accumulated vacation time.

"We believed it was appropriate for the county to pay for that," he said.

The county decided to pay for Millennium to not discard accumulated personal days and sick days because it did not want employees to suffer because of the sale, Mr. Durkin said.

The county also paid $287,000 to its broker Haverford Healthcare Advisors.

Contact the writer: cschillinger@timesshamrock.com

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69 posted comments

Corey Obrien will never get a vote from me. My friends and family all say the same. This was an underhanded scam. I am so frustrated being that the commissioners said they were selling the nursing home in order to help balance the county budget without raising our taxes, then they take 2.4 million dollars LESS than the asking price and sell it to an out of state hedge fund instead of a LOCAL well known businessman with a higher bid. Then, those poor people that have been working there get nailed with COSTLY, VERY EXPENSIVE health insurance, no retirement plans, they are paying money for union dues and a union contract that is not being honored and have been receiving incorrect paychecks with some workers not getting a paycheck at all on payday, and so on and so on. Long time employees, from management to union, once performing county service in a nursing home for decades, are being let go, fired or laid off, to now stand in line at the unemployment office. An article in the times reported that the commissioners sales agreement would include the union contract and that the buying company would have to honor that specific contract, effective until 2012. Guess that fell through, big time! Everyone one of us in Lackawanna County got cheated with this deal, taxpayers and voters. I hope the Times Tribune continues to investigate and provide the people of the County with the facts, and help us get to the bottom of this and right this wrong!

To a Nurse Aide and to a CNA (actually, there are no cna in pa...nurse aide with a certificate to prove it but not the same thing). Disappointed taxpayer had it correct. It's one thing when you walk into a job but quite another when the rug gets yanked out from under you. You walked into your job willingly, he/she walked into theirs. Your voracious rebuttal sounds like bitter feelings which don't belong. Incidentally, most aides work 7.5 hours not 8 but correct, most don't get lunch paid for. But it surely would make a difference to you if it happened suddenly in your current job. I'm not pro-union. They have a place, it's not healthcare. Our healthcare unions in this area border on criminal in their contact with employees who don't want them, calling all hours and knocking on doors. Many feel like their hands are tied if they do not tag along. I liken them to the grimy version of used car salesmen. Up against government regulations, they lose generally but will still stand singing kumbaya. That said, these employees (and not one or two, mind you) had the world tilt on them. They'll be fine someday but they certainly deserved better. This situation had stink on it from the get go. This is one situation where if I remember right, the times actually tried to tip off people with the foreboding issues but not much was said out loud in return. I worked long term a long time...as an aide, as a nurse and as admin and then i ran crazily from government regulations and administration such as this. Hurt the most...the residents. Hurt also, the staff who so willingly give up much time to ensure things run as smoothly as possible. Had it not been for good staff who stayed over, who went above and beyond (and trust me, it ain't for the money always..it truly is love of the residents)...there really isn't much left. Sounds like respect took a beating most of all and the commissioners handed it out. Corey, your flyer is on my porch floor just where i saw you leave it. I've stepped on it often just for giggles.

It's one thing if you chose to work for this new company but the commisioners cast this upon these employees. Many whom have worked for the county for decades. I was in a meeting the commisioners had prior to the sale and the words came directly out of corey obien's mouth that they would sell to a company that would honor the contract with employee and they would have a comparable retirement plan. I can tell you first hand nither happened. You dropped the ball corey. You botched the sale of the nursing home for the employees (your taxpayers) and didn't get the asking price. NICE WORK! and you want to be in Congress. I hope you can sleep at night because I'm sure these employess your disregarded are probably worried how they are going to take care of their families right now thanks to YOU. What was the real motive for the sale?? Your job is to protect and work to benefit the residents & taxpayers of this county. How are you going to correct this? or are you going to let this out of state company get one over on you?

To a Nurse Aide: First of all, I too am a Nuse Aide at another facility. I have friends at your facility who are aides as well as in management positions. May I say to you "welcome to the real world". The reason you are working the extra 1/2 hour is simply because you do not get paid for your lunch now. In the "real world" - not "countyland" we all work 8 1/2 hours, take our 1/2 hour lunch so actually we work 8 hours a day. Get it? I also make about $2.50 less an hour being an Aide at another facility than my friend makes at your facility. So, if you want to trade FT jobs, write your name and number on the comment line and maybe we could arrange something??? See, I am not afraid to work, I am not afraid to be bullied by you "union" people. I love the elderly. That is why I am a CNA and proud of it. As soon as you whiners wuit there , me and my CNA friends could apply there and take your jobs. Nothing would make me happier. Your health care stinks you say? Well, again "welcome to the real world". Your ride on the County Express is over. You can thank Mike and Corey for their caring...ummm I mean NOT CARING ABOUT YOU!!! Obviously your new Company is trying to run it the RIGHT way. Grow up and stop being so self centered!

i am currently employed at the healthcare center. the moral is horrendous---duh. the current commissioners when said they were selling, did not even say thank you to all who worked there. the benefits are not even close to what they were. now, all of a sudden it was sold for alot less. mike kelly was only about 400,000.00 off bid. now they sold for 900,000.00 less. mike, call your lawyer because corey obrien w, who has no chance of beating kanjorski knows millennium's lawyer. also, ask the local vendors if they all got paid yet?

First I love the names Frick and Frack Really they should be called Nit and Wit, but Frick and Frack will do. They did sell us out and where is the FBI now. I hope they investigate the county realy soon, and start at the Nursing home. They did take this company over a local Business man and I hope that he takes action and has a good lawyer. The new owners have never been on the units to talk to the residents, their families or even us workers. When you pass one of them in the basement we as workers are nice and say Hi to them they walk by us like we are not even there. Where are the papers that were signed between the County and Millemiun stating that they are putting this money aside for our benefits that is something that we have to look into and read for ourselves You can not forget Corey that the residents at the home along with their families, us workers and our families vote,and I hope that you have another job lined up cause you will not make it to Congress and maybe not again as commissioner. We as a union have to stick together and not let them break us. We have to be strong and united and let the new owners know that we are 1 I hope that there is no $$$$$$ going between Obrien for Congress and Millenium Management Today the told us that we have to work starting Thurs April 1 an extra 1/2 hour and we are not getting paid for our lunch. Well us as voters and Nursing Home employees have to remember all this county has done for us and vote these yoyo's out

How hard would it be for the Times-Tribune to get the Health plan Summaries for what the employees received before the purchase of the Center and after. These Matrixes are commonly given out at renewal time. Also, show what the employees had to contribute to the cost under both plans. Post them in the paper side by side and let the readers decide if they are "equivalent" or even "comparable"

corey has a facebook page. go on it and voice your thoughts. let him know how much you appreciate all he has done for you. he will do even greater things for this area when he replaces kanjo! he saved the taxpayers from more taxation. he will sell the baseball stadium next and save you even more. mike washo would be nothing without corey. he is the first real commissioner we have since bob cordaro was in office. long live corey, long live washo, long live the democratic majority.go yankees! who cares about some silly union problem. it is spring. corey hit a home run on this one. corey for congress.

Why doesn't an investigative reporter simply ask for the number of employees who resigned from the facility since the new company took over. It would be interesting to see how many union as well as non-union employees left. The times could list an phone # for them to call, one that would guarantee them confidentiality, & they could then offer their reason for departure. Were any exit interviews done? After all, that is a common business practice. A times reported should request under the freedom of information act the entire grouping of legal documents,sales agreements, etc. & do a line item review. Let the chips then fall where they may. That way, we'll really get to see where the truth lies or who the liars are. Why not have the millennium company ceo and the seiu regional rep, as well as a non-union employee who was let go because a position was "abolished" all sit side by side by side for an interview with the times reporting staff? FBI INVESTIGATION? How could there not be? Transparency? This entire situation reeks of a back door deal! O'Brien, Washo, Millennium CEO?I would wager all 3 of these self important ego maniacs all share the same bed linens.

the question is,where did the $900,000 go?Someone has it, was there a sidebar agreement between the company & the politicians in the commissioners office?There are other allegations of monetary discrepancies at the facility, the FBI should be looking at everything there.If the county pocketed $2.4 million less, than this is misrepresentation to the tax paying public!Throw the company out, throw the politicians who misrepresented things out, and have the FBI investing the purchasing company, & their past business practices in the other states they own facilities in. From top to bottom this company manages via lie & intimidation. It is sickening to think this dishonesty could occur at the expense of the taxpayer & worse, at the expense of our elderly!!!!

People work all their lives at a job, they think their future is secure, only to be sold out for peanuts, by an uncaring politican like corey obrein,who still won't back the people whose lives he ruined with his quick fix idea! He could have sold that run down baseball field but i guess baseball is more important to corey than the lives of the eldery people and the quality of there care. p.s. corey if it was'nt for the sacrifice of the residents in that building and the employees who pay there taxes you might be fliping burgers somewhere.

Yes, I know it's a topic for another article but sick and tired made me think about it. So, our beloved president is going to take care and reel in the big insurance companies. Hmmm...do you know who is the worst offender often times??? Do you know who denies the tests YOU need and the medication YOU need. Who doesn't pay bills and takes from our elderly. That's right...some little government run "insurance companies". You're a fool to believe that your costs are going to go down with this plan. Just a tiny view into a doctors office...kept receiving same notice that a form was not completed...over and over. Spoke to 5 government workers all "auditing". I figured out and fixed why they were getting confused when the paperwork was faxed and confirmed over and over. All good, right? Until the next worker sent me another notice. 6 GOVERNMENT workers to complete a simple audit of what in front of them...no numbers...just whether the actual form was in front of them with my name on it.

Pharmaceutical Companies..we like to dog them about the "bribes" they give. As if an ink pen is going to change my mind. Actually, the drug companies by coming into your doctors office are one of the best resources to learn about medications, trends, recalls, etc. The teaching they do for doctors, nurses and staff AND community inservices (free) is invaluable. So they throw a few pens and a pizza on the table...they just may teach me something in that 30 minute lunch that may save your life. Lose your job, lose your spouse, just downtrodden right now and can't pay for your meds...call your doctor and see if there are any drug representatives still left and if there are, I bet you end up with some samples until you get back on your feet. You've been scammed by the media which receives some slanted info from the government officials you so trust.

Corey and you say you want to go to DC to represent the people of norhteast Pa and then you let a company from flordia dupe you into screwing the people of this area and you expect our votes. Better think again or get this right and make sure this contract is honored.

Let's see if i have this straight...county takes bids for nursing home. when a local businessman (who also happens to own nursing homes in the area) realizes that his bid is too low, he offers more. he is told by these clowns washo and obrien that it is too late, they can't reopen to change a bid. then millenium offers them less"to keep the current contract". 2.4 million less! the clowns then reopen to change the amount they are getting! again 2.4 million less!what!! i hope cory obrien doesnt seriously think he will ever win his bid for senate! he is a joke! 2.4 million less! why?? also, were either of these two ever going to tell anybody this?

Touche "disgusted with commisssioners". Our family went through a horrible time with our Dad when he got sick. We went to another nursing home and were disgusted with the poor care and apathy of the staff. We went to Mr. Kelly and he arranged to have him transferred to the Green Ridge Health Care Center. What a difference! The place is beautiful and immaculately clean. The staff is wonderful and have transformed our Dad. He is happy and complacent. I visit the facility twice a day and always see Mr. Kelly. Even when he doesn't know it I see him go into the patients rooms and talk to them. I see him interact with his staff. It's obvious he's well-liked and respected. I can now sleep at night knowing my Dad is safe and secure. What a terrible thing the commissioners did to him. I hope something can be done to rectify this terrible wrong. P.S. Kudos to Mr. Kelly for your continued generosity in paying the heat bill at the Dunmore Senior Citizens Center!